Ex-trader Kerviel says hiding bets easy at SocGen
PARIS (Reuters) - Convicted former trader Jerome Kerviel said hiding trades was commonplace at Societe Generale in 2007 and lax risk controls at the French bank allowed "anyone" to make huge bets worth billions of euros without being detected.
The 35-year-old is appealing a three-year jail sentence for his role in France's biggest-ever rogue trading scandal, which cost SocGen 4.9 billion euros (3.94 billion pounds) and forced it to raise capital in 2008 as the global financial crisis brewed.
Kerviel does not deny he masked his huge 50 billion-euro positions with fake covering trades but claims his superiors knew what he was doing. SocGen denies any part in the trades.
Questioned by the presiding judge and SocGen's lawyers over one of his hidden trades - a 5 billion-euro bet in March 2007 that the German stock market would fall - Kerviel told a Paris court that all his colleagues knew what he was doing and that hiding bets was widespread.
"Everyone did it...Everyone knew and saw what I was doing," said Kerviel, who wore an open-necked light shirt and became increasingly animated during his testimony.
When asked who else at the bank could have taken a 5 billion-euro position, Kerviel replied: "Anyone."
SocGen's representative in court, Claire Dumas, insisted Kerviel's positions were hidden "with great ingenuity" and that the bank would have had no interest in allowing its traders to build up such huge, one-way trading bets.
"Societe Generale's controls were undermined by Jerome Kerviel," she said.
SocGen was fined by the French banking regulator in the wake of the Kerviel scandal for having lax risk controls, though it ultimately avoided any legal responsibility for the losses in the eyes of the judiciary at the ex-trader's 2010 trial. It says it has tightened up its oversight since the affair.
At stake for the bank in this appeal is whether Kerviel will once again be found solely responsible, which would be the deciding factor over whether it has to reimburse 1.7 billion euros in tax write-offs relating to the losses.
(Reporting by Lionel Laurent; Editing by David Cowell)
- Tweet this
- Share this
- Digg this